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Gm Pickups: The Issue Is Safety, Not Regulation

December 11, 1994

Legal Affairs: Commentary

GM PICKUPS: THE ISSUE IS SAFETY, NOT REGULATION

Richard W. Zelenuk wants to tell the world how, in 1989, his father burned to death inside a Chevrolet Silverado. He will receive his chance on Dec. 6, as will other victims of an alleged defect in certain General Motors Corp. pickup trucks. That's when the Transportation Dept. begins public hearings into whether the company ought to be forced to recall up to 6 million 1973-87 C/K pickup trucks because of their propensity to catch fire in high-speed side collisions. "The government hearings are going to let people see real faces, real families who have gone through this ordeal," exclaims Zelenuk.

The wrenching personal tales are certain to be powerful. That prospect has led GM to threaten to boycott the hearings if it determines it won't get a fair shake. GM believes Transportation Secretary Federico F. Pea is biased in part because he overruled a staff recommendation to drop the GM matter. The company has also taken the government to court. In a lawsuit filed on Nov. 17, GM charged Transportation and Pea with engaging in illegal "retroactive rule-making." The trucks had met every existing government safety standard when they were rolled out in 1972. But now, GM says, Pea wants to apply new, unstated standards--two decades later--to hold the auto maker responsible for its vehicles' alleged problems.

At first glance, GM's position is persuasive. The company indisputably complied with all federal regulations when it introduced its then-new full-size pickups. At the time, there were no side-impact crash standards. And in 1978, when a 20-mph test was enacted, GM's trucks, whose "sidesaddle" gas tanks were mounted outside the frame rails, passed the test with nary a fuel leak. If, at the time, the government considered a truck that could survive a 20-mph crash to be safe, how dare it change the rules now, ask GM lawyers. Why blame GM if government standards were too lax?

Other auto makers have rushed to GM's side. They claim they would no longer be able to rely on government standards in designing new vehicles if the government prevails in the current case. A Pea victory could also affect other regulated industries from chemicals to airplanes. Says Lawrence Fineran mf the National Association of Manufacturers: "It's a scary precedent."

True enough--if that's what Pea were really up to. But the issue of after-the-fact rulemaking is a red herring. Legally, Pea is on solid ground. The National Traffic & Motor Vehicle Safety Act lets the Secretary order a manufacturer to recall its products if real-world accident data reveal safety problems--even if the company complied with all federal standards.

The statute also states that if a company becomes aware its vehicles are dangerous, it must notify the government and consumers and repair the defect. Regulations for many industries require companies to correct a glitch that shows up after a product goes to market. With pharmaceuticals, a prescription drug that undergoes clinical trials and is approved by the Food & Drug Administration can be reexamined if unexpected side effects emerge. Abbott Laboratories yanked its FDA-approved antibiotic Temafloxacin from the market in 1992 when severe side effects were reported--even though the drug had passed all federally mandated clinical tests.

BILLION-DOLLAR BILL. Disabling GM's defense doesn't automatically mean the company should recall its trucks. It simply means that the debate should return to the core issues: Are the trucks safe enough? And if not, did GM know them to be unsafe?

Reasonable people can disagree on these managers knew of the alleged defect at least 13 years ago and failed to act. GM denies it had any such knowledge. If Pea proves his case, the company faces a potential $1 billion bill for a recall as well as an increased threat from dozens of pending lawsuits over pickup-truck fires.

In the end, the meeting should be about whether consumers have been adequately protected from an allegedly hazardous product--not about some legal side issue. "This is a classic bout over how safe is safe enough," says Marshall S. Shapo, a Northwestern University law professor. Such a debate isn't easy. No absolute standard exists for what is safe enough. And driving cars or trucks will never be completely risk-free. The hearings can offer the most public good by keeping the focus on what's really important--consumer safety.Kathleen Kerwin